Fresh off record year, ATR wary of hubris

 - December 6, 2007, 7:22 AM

ATR senior vice president commercial John Moore has seen his share of ups and downs in this business, but never since he joined the company a decade ago had he experienced a year like last year, when ATR logged firm orders for 90 airplanes and reported a 15-percent increase in revenues, to $542 million. Last year’s haul equaled 1998 sales, and order figures ranked second only to ATR’s all-time record of 107 aircraft in 1989.

Asia accounted for two-thirds of last year’s sales, and 50 of the 61 ATRs ordered in the region came from two major Indian operators–Air Deccan, which ordered 30 ATR 72-500s, and Kingfisher Airlines, which signed for another 20.

“We predict the ATR fleet in India will approach 100 over the next four years, so it is a natural development to build up the maintenance, training and spares support structure for this fleet,” Moore told AIN. ATR expects to render a final decision on a dedicated spares and logistics center in New Delhi and training facilities in Mumbai and Bangalore before July this year.

Although upbeat, Moore knows better than to turn overconfident and acknowledged that this year’s sales will probably not match last year’s. “It is always difficult to predict orders, and, as an engineer, I prefer to follow deliveries,” he said. ATR delivered nine aircraft in 2003, 13 in 2004 and 15 last year. It also sold 43 used aircraft and delivered 48 used ATRs. Its current backlog stands at 89.

“A reasonable response to our backlog is 25 deliveries this year, rising to about 40 in 2007 and a similar number the following year,” said Moore. ATR has reconfigured its final assembly line to enable higher production rates without a major increase in the workforce. ATR expects revenues of around $1 billion next year, more than double its 2004 income.

According to Moore, the increase in oil prices has contributed to the renewed interest in turboprops, but he was careful not to discount other influences. Growth in regional passenger traffic, turboprops’ field performance benefits and increased pressure on airlines to reduce costs in general have all played a part as well, he added.

In the U.S., St. George, Utah-based SkyWest Airlines will soon decide the fate of Atlantic Southeast Airlines’ ATR 72 fleet following its purchase of the Atlanta- based Delta subsidiary last year. The only other Part 121-operated ATRs in the States–the 41 ATR 72s flown by American Airlines subsidiary Executive Airlines from Puerto Rico and Florida– continue to serve American’s Caribbean leisure markets with distinction, and Moore said he knows of no plans to disrupt the status quo.

Meanwhile, Moore said to look for rapid developments in Eastern Europe, particularly in Russia, where UTAir is considering adding to its pair of ATRs as replacements for An-24s and Yak-40s.